Golden State responds to CBS news report on Claremont water conflict

September 26, 2012 8:26 AM

In a letter released to Golden State Water customers late Tuesday afternoon, Denise Kruger, Golden State senior vice president, challenged the accuracy and methods used in a CBS news report on Claremont’s water conflict.

The segment, initiated by CBS investigative reporter David Goldstein, aired Monday night at 11 p.m. Mr. Goldstein requested that GSW President and CEO Robert Sprowls show written documentation outlining expenditures by the water company, including infrastructure improvements and employee perks like health club memberships and/or expense accounts.

It was evident in the segment that Mr. Sprowls was put off by the reporter’s demands, however, he promised to provide such documentation to Mr. Goldstein “within a few days.” CBS stated that the information was never provided.

In an effort to refute findings made by the reporter, Ms. Kruger released the following letter to GSW customers. It is printed in its entirety.

—Kathryn Dunn

Managing Editor

“Dear valued customer,

Golden State Water Company is committed to customers and the communities we serve throughout California. From our people to the ongoing investments we make to ensure our water systems deliver reliable, quality water; our company strives to provide the best service efficiently.

Our commitment also includes being transparent in how we operate. Regulated by the California Public Utilities Commission, we are required by law to fully disclose and justify all expenses that affect our customers and rates. Golden State's proposed rates and expenses are reviewed by the Commission's Division of Ratepayer Advocates and are part of the public ratemaking process. This ensures we are providing the best possible service at the lowest cost.

More importantly, rates are designed to promote conservation and are intended to help achieve Claremont's stated conservation goals as well as the State of California's mandated 20 percent per-capital reduction in water use by the year 2020. Sustainability is critical and we work to promote water conservation.

CBS Channel 2 in Los Angeles aired what it called an investigative report on our company and the Claremont water system. This is the same station and reporter that has done similar stories about other public water providers serving Southern California. The reporter, David Goldstein, demanded an interview with Golden State President & CEO Robert Sprowls without offering any basic information that would allow for us to facilitate the request.

We asked the reporter to address water usage as a legitimate issue in his story but he did not do so. He only highlighted a customer stating to have a $598.98 monthly bill without any discussion about consumption. To reach this amount, the customer would have used an extraordinary 93,500 gallons of water, which is almost seven times the average for a Southern California family and almost five times more water than the average 1-inch Claremont customer. Additionally, the customer would have paid approximately $30.79 in Claremont Utility Taxes for the one-month period.

We provided Goldstein with information on rates, infrastructure investments and water consumption and offered to meet with him to review the material and to address any additional questions. We continued to try and work with him, offering an unrestricted interview with Golden State's company spokesperson. Mr. Goldstein refused.

The report that was aired did not address the issue of water consumption. We explained to Mr. Goldstein that usage drives the customers' bill and that the average Claremont customer with a 5/8 inch meter uses approximately 9,724 gallons of water and pays $58.74 per month. Customers with larger lots and 1-inch connections use approximately 19,448 gallons of water and are charged $132.44 per month. We provided him with a map of the community that showed overall water usage. We disclosed that customer bills also include a city-mandated 5.5 percent Claremont Utility Tax, which for the average 5/8 inch customer amounts to approximately $38 per year and $86 for average 1-inch users.

Based on the report, we don’t believe his goal was information, as illustrated by his decision to instead film Mr. Sprowls at his home and then ambush and confront him outside his doctor's office. Despite the circumstances, Mr. Sprowls answered every question. Following the interview, at Mr. Sprowls direction, GSWC disclosed to Mr. Goldstein 2011 travel, lodging and meal expenses for the Board of Directors, confirmed Mr. Sprowls’compensation and the amount of his salary that is within the rate structure. The total for the salary and these expenses, amounts to approximately $2 per-customer, per year. Moreover, the company did not reimburse officers for health or country club memberships.

Ultimately, we bring this to your attention so that you can be aware of the facts. We are proud of the service we provide and the transparency with which we operate. If you have any questions, please don't hesitate to contact us. We value our relationships with customers and community leaders and want you to be informed.